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Abstract

Purpose: This paper aims to extend the existing views of coopetition into the broader context of open coopetition. Design/methodology/approach: The authors build on the literature about open innovation cooperation between competitors in the open-source software industry, which we generalize to show that open coopetition between competitors and third parties can be observed in other industries and institutional settings. Findings: The authors outline a research program on the management challenges of open coopetition-related and argue that open coopetition can not only be observed between business rivals but also between partners from university, industry, government and further institutional backgrounds. Originality/value: The authors introduce to so-far neglected roots of the emerging research program on open coopetition and extend the prevailing business focus of open coopetition research to also systematically include open coopetition between partners from business and other spheres of society.
Open coopetition: when multiple players
and rivals team up
Steffen Roth, Loet Leydesdorff, Jari Kaivo-Oja and Augusto Sales
1. Introduction
On June 5, 2018 the US-based aerospace and defense giant Boeing signed a
memorandum of understanding (“MoU”) with Embraer, its Brazilian competitor in the
regional jet market, to establish a strategic partnership that promises to accelerate the
growth of both companies in global aerospace markets. According to the joint press release
published by the Boeing Media Room (2018) on the same day, “the non-binding agreement
proposes the formation of a joint venture comprising the commercial aircraft and services
business of Embraer that would strategically align with Boeing’s commercial development,
production, marketing and lifecycle services operations” in the form of a joint venture
“comprising the commercial aircraft and services business of Embraer that would
strategically align with Boeing’s commercial development, production, marketing and
lifecycle services operations”.
The deal had faced a lot of criticism [AvioNews (World Aeronautical Press Agency),
2018] from a number of stakeholders of Embraer in Brazil, including industry and
employee associations, high-ranking federal government officials and politicians. The
negotiation was even halted by injunctions before the venture was finally cleared by
Brazilian justice (Chicago Tribune, 2018), ironically, one day after Christmas, on
December 26, 2018.
The drama is likely to continue. A master transaction agreement was executed by both
parties on January 25, 2019, but not without a lawsuit (New York Times, 2018), which was
now filed by the Brazilian investors’ association (Abradin) and made public on January 22,
2019. To cooperate, these two competitors entered in a complex partnership that will create
two joint ventures (the first to focus on executive jets; and the second to focus on the
development of the KC 390, a defense aircraft), will require exchange of shares between
Boeing and Embraer and shared management with unusual characteristics: the commercial
aviation joint venture will be led by Brazil-based management, including a president and
chief executive officer; at the same time that Boeing will have operational and management
control of the new company, reporting directly to Boeing’s Chief Executive Officer in the
USA.
Boeing is expected to pay US$4.2bn for its 80 per cent stake in the new joint venture to be
formed. Embraer is estimated to receive net proceeds of $3.0bn (after taxes and
transaction costs totaling US$1.2bn approximately) (Reuters, 2018).
We know organizations may get trapped by their traditional ways of doing things. However,
what if firms like Embraer and Boeing were offered viable alternative options to cooperate
openly with each other joining forces to innovate minimizing all the hassle, costs and heavy
bureaucracy involved in this complex cross-border business combination?
Steffen Roth is based at La
Rochelle Business School,
La Rochelle, France and
Yerevan State University,
Yerevan, Armenia.
Loet Leydesdorff is based
at the Universiteit van
Amsterdam School of
Communications Research,
Amsterdam, Noord-
Holland, The Netherlands.
Jari Kaivo-oja is based at
the University of Turku,
Turku, Finland.
Augusto Sales is based at
KPMG Global Strategy
Group, Rio de Janeiro,
Brazil, Fundacao Getulio
Vargas, Rio de Janeiro,
Brazil and Ibmec Business
School, Rio de Janeiro,
Brazil.
DOI 10.1108/JBS-11-2018-0192 ©Emerald Publishing Limited, ISSN 0275-6668 jJOURNAL OF BUSINESS STRATEGY j
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Defined as a situation where rival firms simultaneously compete in some contexts and
cooperate in others (Bengtsson and Kock, 2000), “coopetition” has attracted a substantial
body of research, particularly about innovation-related coopetition, with some of the most
prominent examples including the cooperation between Sony and Samsung, SAP and
Oracle, Thales and Airbus, Sanofi and BMS or Apple and Amazon. Yet, these examples are
particularly instructive not only due to the sheer size and importance of the involved
companies and budgets but also indicative of the fact that the focus of most studies has
remained confined to the analysis of the properties and outcomes of these classic forms of
coopetition (Salvetat et al., 2013).
On the other hand, open innovation commonly refers to co-creation processes with
complementary rather than competitive partners. For example, Enkel et al. (2009) report
that although many companies count their competitors among their most important
knowledge sources, most companies prefer to engage in open innovation with customers,
crowdsourcing platforms, universities or companies from non-competing markets. This
tendency appeared natural in the light of the typical open innovation risks and obstacles.
Only a few years after its formulation (Chesbrough, 2003), open innovation had already
been studied at all relevant levels of analysis including at the individual and organizational
level as much as at the level of value networks, industries and national institutions (West
et al.,2006
).
Early groundwork (Tether, 2002) notwithstanding, the mainstream of the field of innovation
studies has long ignored the possibility that open innovation could also be conducted with
competitors.
In this article, it is our ambition to extend the classic view of coopetition and to explore the
broader context of open coopetition, i.e. open innovation cooperation between competitors
that includes third parties such as networks, platforms, communities, ecosystems and
partners from politics, science and other areas of society.
2. Open coopetition: the open-source of the concept
The origins of the term open coopetition can be traced back to an article entitled “Open
Source Coopetition Fueled by LF Growth” written by the journalist Jay Lyman in 2012. In this
work, the author uses a more specific concept of open-source coopetition in the context of
his report about how the Linux Foundation mediates cooperation between competing
companies in the Linux open-source software ecosystem. Similar observations were also
reported from the financial service industry, where it was found that highly competitive
market actors such as J. P. Morgan, IBM or BMC may coordinate their activities to support
the development of open-source solutions to shared IT problems and challenges.
Still, with a clear open-source focus, Teixeira and Lin (2014, p. 6) first coined the term open
coopetition in their case study on “Collaboration in the open-source arena” as they:
[...] witnessed a peculiar extent of collaboration between rival firms from the evolving network
[...] leading us with the proposition that the open-source community can also be a great arena to
observe the phenomenon of coopetition [...]. However, we were not able find published
Management or Information Systems literature exploring coopetition features in the open-source
arena, an area that we will further explore while proposing already a neologism:
Open-coopetition: A portmanteau of cooperative competition in the open-source arena, where
R&D is jointly performed by competing firms by open-source manners, giving-up authorship-
granted intellectual property rights for maximizing both blueprints transparency and
collaborative benefits.”
The lead author has continued this research program focusing on management- and
business-model-related aspects of intra-ecosystem coopetition, and then extended
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research from inter-ecosystem competition to the broader context of open coopetition
between open-source ecosystems. The link between the concepts of open coopetition and
open innovation, however, has remained rather implicit in these pioneering studies.
While this pioneering research has made it reasonably evident that open coopetition is a
recurring phenomenon in the open-source software industry, the narrow industry focus
might suggest that open innovation between competitors and third parties is limited to this
industry. The absence of the label open coopetition in non-software-related industries,
however, is not an indicator for the absence of open coopetition in other industries. Quite
the contrary, typically dyadic coopetition has been discovered in virtually all industries
(Nemeh and Yami, 2016).
In our opinion, there is no need to confine the concept of open coopetition to specific
industries, dyadic constellations or levels of analysis. Rather, we may generally define open
coopetition as simultaneously collaborative and competitive open innovation between
competitors and third parties such as networks, platforms, communities or ecosystems.
In the remainder of this study, we argue that open coopetition not only takes place in a
growing number of industries but also constitutes both a management challenge at the
individual or inter-firm level and as an organizing principle of many regional or national
innovation systems.
3. Open coopetition beyond open-source: a management-research program
Situations in which rivals collaborate both upstream and downstream and, moreover,
expand their collaboration to third parties have not yet been systematically explored, and
therefore, constitute a veritable management (research) challenge. Typically, coopetition for
product development implies the sharing of knowledge and resources (Salvetat et al.,
2013). Notwithstanding the potential advantages of this cooperative approach, there remain
considerable risks in open coopetition because the strategy creates opportunities not only
for the gain but also the loss of knowledge or as knowledge is never lost if it is shared
even with an ultimately hostile competitor rather the loss of a knowledge-based
competitive advantage (Barlatier and Josserand, 2018).
Thus, partners in open innovation are regularly confronted with paradoxes of openness and
disclosure (West et al.,2006;Schneckenberg, 2015), which are intensified if the open
innovation partners are competitors within the same industry in general and if coopetitive
open innovation is extended to include larger networks or communities in particular. So far,
however, the management literature on open innovation has mainly studied the classic open
innovation relationships between competitors where the involved actors can easily be
identified (Fernandez et al.,2014). The identification of techniques and strategies for the
management of open innovation between competitors and within the multi-partner
arrangement, therefore, remains a major challenge for future research in open coopetition
research.
One can consider addressing this challenge by exploring the management principles
identified in the management-of-coopetition and the open innovation-management
literature. In the former context, the dominant concepts are the separation principle, the
integration principle and the co-management principle. The first principle suggests that
individual members of coopeting organizations remain incapable of navigating the paradox
of coopetition, and therefore, need to be separated into either competitive or cooperative
divisions located in different parts of the organization (Bengtsson and Kock, 2000). By
contrast, the second principle rests on the assumption that this internal separation strategy
causes intra-organizational tensions, and therefore, suggests the strategic integration of the
collaborative and the competitive aspects of coopetition management, whereas a recent
study by Felzensztein et al. (2018) suggests that coopetition becomes more important
(again) as the coopetition relationships mature.
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As with many actual or perceived dichotomies, there have also been attempts to combine
the extremes, which result in the proposition of a co-management approach (Fernandez
et al.,2014
). These three principles could now be related to the three basic logics of open
innovation, i.e. the inside-out, the outside-in and the coupled process of open innovation
(Chesbrough, 2003;Schneckenberg, 2015). As a result, one can construct a 3 3 matrix of
nine options for the management of open coopetition (Table I).
A future research challenge would be to find out whether specific open innovation
processes correspond to specific coopetition management principles in the context of open
coopetition. Furthermore, the matrix can be expanded by referring to the literature in which
one distinguishes four or more types of innovation openness on the one side and to
advance yet to be identified coopetition management principles on the other side. In fact,
open coopetition might well lead to a revaluation of management functions such as
customer relationship management or community management, and thus, have a
significant influence on the redefinition of organizational architectures, including particularly
visible examples such as the strategic re-design of corporate workspaces in the context of
the emergence of open corporate co-working spaces.
Considering the framework for classifying open innovation research as provided by West
et al. (2006, p. 288), we furthermore suggest that future challenges in open coopetition
research would not only be limited to the analysis of individual or organizational issues and
aspects of open coopetition but also to imply research on the level of value networks,
industries or sectors and entire national economies including their specific institutional
environments. In Section 4, we shall, therefore, develop an outline of research challenges
that emerge if we extend the open coopetition research agenda to the level of the broader
institutional contexts of both competition and open innovation.
4. Open coopetition and the triple helix: the research program extended
The open innovation model can be compared with the triple helix model of
universityindustrygovernment relations as both refer to attempts to find surplus value in
stimulating industrial innovation. The triple helix model was first articulated as a metaphor at
the institutional level, that is, in relations among universities, industry and government
(Etzkowitz and Leydesdorff, 1995). The lead questions were: When do these relations
provide surplus not only for the individual partners but also on top of that, at the level of the
interactions as a non-zero-sum game? When is a viable system shaped that can sustain
innovation? National or regional systems of innovation can be flourishing or in decline. How
can one assess whether a system is mature and perhaps locked-in; or in the upswing of the
strategic vector?
In the triple helix context, these questions can be reformulated in terms of when do the
institutional relations contribute synergy to the system? Synergy, however, is a systems
property as the underlying dynamics are not to be attributed to the agents “carrying” the
system but to specific qualities of their relations. While the institutional triple helix model
focused on agency leading eventually to studies of the “entrepreneurial university” and
entrepreneurship more generally, these agents can be considered as the visible
Table I Nine yet to be explored options for open coopetition management (authors
provided)
Separation Integration Co-management
Inside-out
Outside-in
Coupled
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representatives of different subdynamics from an evolutionary perspective. The three
subdynamics are the industrial one of wealth generation, the academic one of knowledge
production and the need of regulation and control. The institutional networks can then also
be considered as the retention mechanisms of an evolutionary dynamics among these three
(or more) functions.
5. Competing logics: open coopetition beyond the triple helix
Universities, companies and governments compete not only with other institutions of
the same type but also with each other as they follow and pursue different and often
competing logics and goals. The arising tensions between institutional isomorphism
and the need for innovative reforms and structural adjustments are probably most
apparent not only in the context of universityindustry collaborations but also may occur
in all types of triple helix partner configurations. Prominent cases beyond the
universityindustrygovernment context include relations among competing
institutional logics in health, economy and politics within the context of national and
regional health-care systems.
These cases are also indicative of the circumstance that the relative importance of the
competing logics may not only differ among national or regional systems but also change
over time. The increasing importance or even dominance of economic considerations over
health-related logics is legion in a large body of research on health system reforms, and
similar constellations have been studied, e.g. for the reason of the increasing dominance of
money and power issues in higher education. Against this backdrop, coopetition among
partners that follow different institutional logics appears as a most critical yet under-
researched aspect of innovation systems and further organizational or network
constellations at the regional, national or international scale.
Triple helix coopetition itself can be considered as open coopetition to the extent that the
cooperation among the competing triple helix partners takes place against the background
of “fourth parties” as suggested by Quadruple Helix models of innovation (eco-) systems.
The fourth helix is associated with increasingly interactive and co-productive public
audiences in the civil society. This perspective makes an even stronger case that triple helix
coopetition is open coopetition as it systematically involves cooperation or even again
coopetition with fourth-party stakeholders.
The metaphor of a Triple Helix invites to extending the model to more than three helices
(Leydesdorff, 2012, p. 30). A major challenge to research in open triple helix coopetition
remains the identification of strategies for adequate and probably context-specific
extensions of the triple helix model, for example, along the lines of an exploration of a full
spectrum of function systems (such as politics, economy, science, education, art, religion or
mass media system). This approach might well-result in the design of context-specific
helices beyond the standard case of universityindustrygovernment relations, such as a
classical triple helix complemented by the mass media or combinations of politics, art and
mass media in the context of creativity-oriented innovations.
Moreover, as the current importance of the individual competing logics within triple helix
constellations may differ not only between national or regional contexts but also change in
time, another line of triple helix coopetition research would need to address the question
how to measure the relative importance that political, economic, scientific, educational or
religious logics have to a particular (innovation) system. While early attempts to address
similar challenges at the macro level (Roth et al., 2017) are definitely inspiring, they have
hitherto remained too abstract for the analysis of concrete national, regional and
organizational innovation systems.
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6. Conclusions: open coopetition and the exchange rates of society
In this article, we defined an updated research program of open coopetition, a term so far
confined to designate mediated cooperation between rivals in open-source software
ecosystems. Unlike standard coopetition, open coopetition refers to a situation where
competitors cooperate not only with each other but also with third parties such as networks,
platforms, communities, ecosystems or triple helices. We demonstrated that this open form
of coopetition does exist not only in the software industry and outlined a potential research
program on open coopetition between partners from other industries and even partners
from contexts as different as an industry, university, government and further institutional
settings.
In this context, we also addressed open coopetition management challenges, which we
suggested to meet by exploring coopetition management with open innovation
management principles. Finally, we discussed research challenges that emerge if we
extend our open coopetition research program to the level of regional or national innovation
systems. At this level, we suggest that coopetition between partners that follow different
institutional logics and between these partners and a broader public or the civil society,
respectively, remains a yet under-researched field of open coopetition research.
As an elaboration of the triple helix model of universityindustrygovernment relations, we
furthermore argued that partners from academia, politics and business regularly both
cooperate to achieve higher goals such as positive regional or national structural effects
and compete as they all try to establish their respective institutional logic and goals as
dominant logic and as the main goals both within the triple helix context and in relation to
broader audiences.
One particularly challenging stream of research in open coopetition may, therefore,
examine how coopeting organizations that follow different institutional logics decide on the
relative significance of these logics (Figure 1).
As depicted in Figure 1, one can distinguish between intra-institutional and inter-institutional
open coopetition. An example of intra-institutional open coopetition would be two
Figure 1 Intra- and inter-institutional open coopetition
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competing firms (e.g. Boeing and Embraer) that cooperate with each other (e.g. in R&D as
already the case with Boeing and Embraer) and with a community of users or customers
(not present in the existing configuration of the BoeingEmbraer coopetition model). In the
case of inter-institutional open coopetition, however, one would expect cooperation
between partners from different institutional backgrounds that both compete for legitimation
from a broader social context and may nonetheless cooperate to achieve synergies or
higher goals for this social context. An example might be coopetition between a firm and an
academic research unit and probably further parties such as stakeholders from the
respective markets, publics or arenas.
In such contexts of inter-institutional coopetition, an interesting question is, indeed, which of
the coopeting institutional logics is dominant in a given social setting. Research on inter-
institutional coopetition, therefore, also raises the issue of what can be dubbed as the
“Exchange Rates of Society” in Figure 1, an expression we have chosen to designate as the
concept of the regularly changing relative significance of the different institutional logics
both for each other and for the larger social context. In other words: our extension of the
open coopetition concept (which originally was limited to the open-source industry) to other
industries and to the level of the broader institutional context of both coopetition and open
innovation ultimately raises the question about the deeper meaning of competition and
innovation at the national, regional or organizational level.
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Functional differentiation,
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Corresponding author
Steffen Roth can be contacted at: roths@excelia-group.com
For instructions on how to order reprints of this article, please visit our website:
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... Whereas one might certainly plead that every attempt to prevent change in a social system will necessarily result in (probably a different kind of) change in that social system, the basic ambition to prevent a market from "marketizing" is a compact argument for the idea that markets are more than economic institutions. The consequently required interactions between strategic management research and fields such as economic sociology or economic anthropology would certainly be worthwhile, as they might indeed lead to the discovery of a broader market concept in the context of which we could analyse exchanges rates not only between different economic market segments and their corresponding currencies but also between the exchange media of all function systems (see Roth, Leydesdorff, Kaivo-Oja, & Sales, 2019, Fig. 1). This approach would considerably advance existing multimarket firm perspectives. ...
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